Fed Cuts Rate, Forecasts Cautious Cuts in 2025

The Federal Reserve cut its benchmark interest rate by 25 basis points to a range of 4.25% to 4.5%, but outlined only two cuts for 2025. The decision reflects a cautious approach amid persistent inflation and a strong labor market.

The rate has been cut by 1 percentage point since the first cut in September, but the Fed’s new forecasts show inflation rising to 2.5% in 2025. That’s above its 2% target, prompting some policymakers to slow the pace of rate cuts.